08
January
2020

Is your family protected?

Are you financially protected?

Insurance and financial protection are never “party talk” and no one ever gets excited about a great insurance policy. It therefore, stands to reason that most of us rarely think about what insurance we have in place if any, and assess whether it is still appropriate.

When we are young, we like to think we are bullet-proof and things like life insurance and income protection are far from the top of our priority list - some of us just flat out think we don’t need insurance at all. I understand this thinking for sure, no one likes paying insurance premiums!

A colleague of mine has a great line to put this into perspective; he says “what would you say to a mate who bought a brand new car and didn’t take out insurance on it?…..we’d all call them an idiot!”.  The financial consequences of being unable to work for 6 months or more are potentially far greater, yet only a small percentage of Australians have income protection insurance.

The amount of people financially exposed in Australia due to underinsurance is frightening. According to TAL 55% of people acknowledge they are underinsured and the death or disablement of them or their partner would result in significant financial stress.

Australia has prided itself on the “she’ll be right” mantra, and this certainly runs true in personal insurance. We all acknowledge that unfortunately people pass away unexpectedly, and some suffer serious sickness or injury that prevents them from working for a period of time - we just never think it will be us. We can’t prevent these things from happening but we can protect ourselves and our family financially.

A good financial planner will be able to assess your situation and determine the types and level of cover you require based on your individual needs.

The main reasons why most of us don’t have insurance is apathy and the belief that it won’t happen to us, the other is the cost.  Many of us simply do not have the spare cashflow to pay the premiums and others would like to direct any spare cash to other things such as investments or reducing the mortgage. In this case, premiums funded by superannuation maybe the answer. This does have some consequences that should be discussed with a financial advisor, but it is an option to make insurance possible.

Although not the sexiest part of achieving our financial goals, insurance plays an important role in financial planning. We will probably never discuss the great income protection policy we just got at our next Christmas party, but hopefully having it will prevent a conversation around having to sell the family home because we had no income for 12 months.

Author; Alex McKenzie Categories: Future Financial Services Blog

About the Author

Alex McKenzie

Alex McKenzie

Owner at Future Financial Services

Past:

  • Paraplanner at Zammit Partners Investments
  • Unit Trust Administrator at Colonial First State

Education

  • University of Western Sydney
  • Penrith High

About

As a Financial Planner I help people to achieve what they would like in life. This involves helping you to identify the things in life they would like , developing plans to help achieve them and strategies to protect what you already have. We do this by providing Financial Advice to guide you through your life stages.

The financial planning process involves determining a clients current situation and financial objectives and tailoring strategies to assist in best achieving those objectives.

I am an expert in superannuation, investments and insurance, these are tools we use to help you achieve your goals.

I aim to use my knowledge of superannuation, taxation and Centrelink to efficiently use your assets and income to achieve your financial goals.

Retirement and pre-retirement planning, wealth creation, asset protection, insurance planning and estate planning are all areas of advice that I provide.

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